Business owners beware! The Biden administration has proposed doubling the current capital gains tax. When those tax increases will go into effect is unclear, but many economists are expecting it to occur between 2022 to 2024.
The average business takes about 10 months to sell, so there’s not a lot of time to waste. If you’re a business owner and you were thinking about selling in the next few years, you might want to act soon to minimize your tax liability.
Roughly speaking, if you sold for $10 million today, you’d net $8 million after capital gains. If you worked hard to build up your company to $12 million by 2023, and the proposed new taxes are already in effect, you’ll net out just $7.5 million.